Fresh off a string of recent acquisitions, Parkland USA is set to quintuple its business over the next three years. A big part of that growth will center around its On the Run (OTR) brand, which Parkland is now rolling out across its entire U.S. network, after acquiring the exclusive U.S. licensing rights from Alimentation Couche-Tard in 2020. Parkland is currently building out the OTR brand offering, investing $350 million in its foodservice program, implementing self-checkout and electric vehicle (EV) charging, expanding its Journie loyalty program and exploring frictionless checkout options, among other initiatives.
Given its aggressive growth plans, tech-forward approach and roster of veteran c-store talent leading the charge, CStore Decisions is recognizing OTR as a Chain to Watch.
In 2021 alone, Parkland more than tripled its fleet of company-operated stores, growing from 60 to 215 sites.
“We’ve acquired 20 companies in the past 36 months, including 10 last year, which was a pretty furious pace,” said Doug Haugh, president of Parkland USA. “It’s been a very deliberate, focused strategy, in terms of where and what we’ve
Parkland is focused on expanding its footprint in four regional operation centers — the Southeast, Midwest, Rockies and Pacific Northwest. Initially, the company plans to build about 50-100 stores in each regional base.
“Our theme, internally, has been to ‘5X the business’ by 2025,” Haugh said.
That includes reaching 500 company-operated U.S. stores and expanding its dealer business from the roughly 425 dealers today to 2,500 over the next three years.
“We’re actively working on moving through our entire system of redeveloping and rebranding all of our company-operated sites to the OTR brand,” said Jeff Bush, vice president of business development, Parkland USA.
At present, the OTR brand design is already rolling out in Florida and North Dakota. The OTR brand will fit locations measuring at least 3,000 square feet up to large travel centers. Today, Parkland operates 25 travel centers and several are already being rebranded as OTR.
“OTR is a premium brand with a good food offer, clean locations and lots of parking spots,” noted Jay Erickson, chief operating officer for Parkland, who is responsible for scaling and implementing the OTR brand.
Some existing sites won’t be able to meet the requirements for parking or have foodservice ability. Erickson noted the company is evaluating using an alternate banner for these smaller stores.
Becoming On The Run
When customers arrive at OTR, they’ll find a fresh and clean large-format store with a colorful brand design, best-in-class restrooms and technology integrated throughout the store experience.
“It’s going to feel extremely open, extremely well set and well placed,” Bush said. “You’re going to really feel compelled to move towards our foodservice, to our beer cave, to our fountain.”
Earlier this year, Parkland invested $322 million to purchase M&M Food Market, a premium, restaurant-quality frozen food retailer in Canada, which it plans to leverage as it develops OTR’s proprietary foodservice platform. Given that Parkland has many regional operations throughout the U.S., the foodservice menu will include a regional flare. Parkland is developing the food program across four core groups: pizza; breakfast, including breakfast sandwiches; chicken; and burgers and fries.
“We see a strong indication to move forward with a really strong breakfast offering, a really strong lunch offering,” Bush said.
The next step will be evaluating which take-home programs might work best for dinner and integrating the M&M Food brand into that take-home foodservice offering.
OTR aspires to create a unique food offer, but one customers want to eat every day. And it wants to be seen in the same light as a quick-service restaurant (QSR) as it competes with sub and sandwich shops, smoothie shops and QSR breakfast offerings rather than the c-store across the street.
The food program is launching in two phases. Food 1.0 is already underway and will run through the end of 2022. It includes introducing the initial food offerings into all the sites under the existing Bites on the Run banner. Food 2.0 is a 2023 initiative that includes building a proprietary brand that stands alone.
Staying true to its plans to integrate technology throughout the stores, Parkland is introducing bean-to-cup coffee dispensers and touchscreen foodservice ordering kiosks, while investing in digital fountain drink equipment with touchscreens.
“We’re understanding how to be technology first in the coolers, fountain and coffee,” Bush said. “Everywhere a customer interacts with us, we want to make sure they’re getting the best optimal service, and we want to leverage technology to make that as efficient as possible.”
That extends all the way to the point of sale (POS). Self-checkout is a big initiative for the brand, with every site being analyzed for self-checkout potential.
“We just ordered our first 30 stores of self-checkout, where we’ll have at least two self-checkouts per location, so that will be a huge growth area for us,” Erickson said.
“We’re getting it in as many stores as we can, as quick as we can get the hardware,” Haugh added.
Parkland is in the process of exploring various frictionless checkout options including walk-in/walkout technology. It’s seeking a solution that not only integrates with all of its systems, but that is also seamless from both a customer and employee standpoint.
“We do think a version of the ‘just walkout’ technology, whatever format that comes in, — we’re experimenting rapidly — is going to be a requirement for the future, just to be able to not queue up at all,” Haugh said.
The chain is also evaluating delivery partners to allow guests to order ahead for delivery or pickup.
“We’re really trying to make it as frictionless as possible for our customers to do business with us,” Erickson said.
Technology is a crucial consideration as Parkland looks to scale the OTR brand.
“When I look at how we’re going to scale OTR, it’s first of all, being very simple in our architecture, but also making sure that we have very hardened systems, that we have a platform and a foundation that we can build from,” Erickson said.
Because Parkland’s fleet of stores is made up of numerous small acquisitions, lots of different systems currently exist. Erickson noted the last nine months have involved what he calls ‘digesting the acquisitions.’
“The team has been focused on systems, process and technology,” Erickson said. “We’re standardizing on one technology system and then getting everybody onto that system.”
For example, all acquired stores are now up and running on the same back-office software. By the end of 2022, one common POS system will roll out to all the stores, with other core foundational systems to quickly follow in early 2023. Once a common platform is up and running, Erickson expects day-one integrations to be possible due to that foundational work.
“The quicker you can integrate, get them on your planograms, on your systems, then they become one of your stores overnight, and you can start realizing synergies faster,” Erickson said.
The company is also turning its attention to expanding its Journie Rewards loyalty program, which has done well in Canada, and integrating delivery and order ahead into the loyalty app. Journie Rewards gives customers discounts based on the purchases they make in-store. It incorporates an ACH debit card that allows for discounts at the pump. Parkland is working to integrate new features into the loyalty program that allow customers to earn discounts and rewards on items and services other c-stores aren’t offering.
“We want to run great, robust promos on top of that, as well as delivering a great artificial intelligence background algorithm behind it, ensuring customers are getting the discounts on the things they purchase,” Bush said, adding the app will deliver strong customization and personalization elements driven by customer purchase trends.
“At the end of the day for us, if a customer’s got a process that has any friction in it, our goal is to remove all friction for customers everywhere they interact with us, whether it’s online, ordering food, choosing our app, getting fuel or buying food in our stores,” Bush said.
In the forecourt, Parkland has an eye toward technology as well. The company is partnering with FreeWire Technologies to roll out EV charging and analyzing sites to determine where EV is the best fit for customers. Haugh expects over-the-road sites to be strategic locations for EV, attracting travelers in need of a place to charge their vehicle, as well as an ideal place to relax, eat and visit the restroom during the 20-30 minute charge.
Parkland USA retail locations also partner with numerous gas brands including Exxon, Chevron, Valero and Shell. “We continue to strengthen those partnerships across the U.S.,” Bush said.
Parkland also features the OTR fuel brand, which it is building out across the U.S. “That will be a big part of our portfolio as we continue to expand,” Bush added.
At present, OTR features 16 sites in Florida with OTR-branded fuel.
Set to launch in Q1 of 2023, Parkland is actively developing its OTR dealer program, taking the investments it’s making in its company-operated stores and providing those to its best dealers.
For most dealers with a single store or a handful of stores, it can be challenging to compete with larger chains that have more access to programs like loyalty apps or a frictionless experience, Erickson pointed out. “Because our OTR dealer offer is going to be so aggressive and so technology focused, I think it really will give people an option to compete with the big majors,” he said.
Not every site will qualify, in terms of square footage, quality, foodservice ability and required in-store offerings, but many will, Haugh noted. “We really want to extend that to a very healthy group of dealer partners that we can supply both fuel and other services and products, but also provide them the OTR brand for their stores,” he said.
Chain to Watch
Bush credits the team behind OTR as one thing that makes it a Chain to Watch.
“We have the best bench of talent across the U.S., bar none,” he said. “We have people from all scopes of retail, all scopes of foodservice, loyalty, development, marketing and merchandising with unbelievable background experience and a portfolio of success in their own right.”
Parkland USA includes three division presidents — Haugh, Bush and Erickson — who have run large, successful convenience stores. Bush was previously the president at Savannah, Ga.-based Parker’s, while Haugh brings along retail and technology history to his role, and Erickson brings with him 25 years of experience at Kroger. He has extensive experience scaling a major brand, having managed EG America’s integration of 1,700 stores following its acquisition of Kroger. Bush also credits the chain’s ability to leverage technology, integrate systems, tap global partners and take a forward-looking approach.
“We’re not just moving along with changing demands, we’re trying to get ahead of those demands and ensure that what our customers are going to be looking for in the future … that we’re developing it,” Bush said.
Haugh expects OTR will be known for its great locations, consistent execution and bright, clean convenient experience for customers. While anyone can build a quality demonstration store, consistently executing on the experience while scaling the brand is a key mission for OTR.
Parkland’s culture also makes it special, Erickson said. “Our culture comes straight down from our CEO, Bob Espey, and it’s all about our employees and customers as the main focus. If you take care of those two, you’ll be successful.”
As it prioritizes employees, OTR is developing a robust online training program across the network.
“It’s a big focus for us to really take care of our employees through training that will allow our associates to first take care of our customers, but second be able to grow in their roles and be able to do whatever they want to do in the organization,” Erickson said.
“I know a lot of people are struggling to find folks in this industry, but we are just awash in talent,” added Bush. “People are knocking on our doors every single day to come work at Parkland. And it just speaks to all the great things we’re doing and the great teams that we’re building here.”
By the end of 2022, Parkland expects to have 30 sites converted to the OTR brand, with another 70 sites to follow in 2023.
“By the end of next year, our goal is to have 100 OTRs that have been converted,” Erickson said.
While it’s an ambitious plan, Erickson would like to go even faster, but supply chain and subcontractor labor shortages have required a slower pace.
As Parkland pushes forward toward its goal of ‘5Xing the business’ it’s looking to grow through both new-to-industry sites and acquisitions “whether that’s tuck-in opportunities, single sites, all the way up to tens or teens, all the way to large platform acquisitions,” Bush said.
“We want rapidly growing markets where there are new customers to service, there’s a demographic tailwind, if you would, where there’s new customers every day, and new neighborhoods going up, new c-stores to be built,” Haugh said.
Parkland also looks for markets where it’s difficult to supply fuel since Parkland, as a vertically integrated company has deep capabilities when it comes to supplying and distributing fuel. The company ships its own fuel using a fleet of nearly 700 trucks.
“We want to leverage that to help grow the U.S. business, and the retail business specifically, that much faster,” Haugh said.
Parkland also operates 60 car washes, many of which were picked up through acquisitions. On the docket this year is making decisions about whether to unify all car washes under one brand or continue to leverage the current brands.
“We’re also really looking forward to showing people what we can do with the OTR brand. It’s a great brand,” Bush said. “We’re building out a great platform around it. And we’re really excited to show everybody what we can do with the offerings across all the different segments of retail.”